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    SouthernLandLady's Avatar
    SouthernLandLady Posts: 6, Reputation: 1
    New Member
     
    #1

    Mar 12, 2008, 07:19 PM
    LLC and tax liablity
    I want to set up a real estate LLC in Florida. Will I need to pay the tax stamp every time I move a property into or out of the LLC?

    Any suggestions about using these $150 services on the web to set it up?

    You may remember my previous question about setting up an LLC in Florida. I did use an attorney to set it up and then transferred the property into it using a warranty deed. Now the state says we owe $1,500 based on the outstanding loan amount that was on the property. The attorney we used to set up the LLC says, "not so" since only the form of ownership changed rather than the actual ownership. We got the tax bill today. Any suggestions on how to fight this? If we have to pay the tax, do you think the attorney owes us the $750 he charged for setting up the LLC?

    It isn't economically feasible to pay $3,000 every three years when the balloon payment is due ($1,500 to put back in our names to refinance and then $1,500 to put it back in the LLC). We even asked the attorney about this before he set up the LLC so we are really upset!

    BTW: The property is 2 lots with a trailer on it that we rent out so we can't get anything more than a 3 year loan since it is considered undeveloped property. So a longer loan is not a possibility.

    Thanks for your help.
    excon's Avatar
    excon Posts: 21,482, Reputation: 2992
    Uber Member
     
    #2

    Mar 14, 2008, 06:49 AM
    Hello Landlady:

    If I knew the law well enough to handle stuff on my own (such as knowing about the tax stamp), then I'd use the cheapest service I could find to set up my things.

    However, if I DIDN'T know how to administer my LLC (such as knowing what to do about the tax stamp), I'd have my CPA do it. Yes, it'll cost more in the short run, but it'll save you tons in the long run.

    excon
    Fr_Chuck's Avatar
    Fr_Chuck Posts: 81,302, Reputation: 7692
    Expert
     
    #3

    Jun 8, 2008, 01:43 PM
    1. The loan on the property will have to stay in the LLC name only, if you are switching it back to your name personally you have just defeated the use of a LLC by mixing personal and coporate. The LLC in fact buys ( transferes) the property from you to it, but the deed and mortgage has to remain in the LLC name not being switched back and forth.

    And I am sorry, can't get a loan?? Is there a credit problem, With good credit you should be able to name your terms. Sounds like you need to get a mortgage broker and shop around.

    But once the LLC is set up and the property transferred you don't keep switching it back and forth, that basically destroys the protection you were trying to set up.

    Example if I was sueing you, I would use that as an exmpale that it is really personal property and only being put in a LLC to have it hiden or protected.

    And they changed your? How much 1500 just to set up a LLC?

    Have your attorney write to the tax department and explain under what state code you don't owe the tax. Since he is sure, he would know under what laws you don't owe it.
    excon's Avatar
    excon Posts: 21,482, Reputation: 2992
    Uber Member
     
    #4

    Jun 9, 2008, 04:40 AM
    Hello Southern lady:

    I am not a lawyer, however I'm going to challenge your lawyers declaration that only the "form" of ownership changed...

    No it didn't. YOU owned once. Then you formed a brand new entity and sold the property to the new entity. Now that entity/corporation, owns it. You are NOT your corporation.

    That a taxable transaction. The state doesn't care WHO owns the stock in the corporation, or who sold the property, or whether they're the same people.

    excon

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